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Life satisfaction and tax morale: The role of trust in government and cultural orientation

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  • Ciziceno, Marco
  • Pizzuto, Pietro
Abstract
Taxes are essential for a government to function correctly, because they fund public services and promote long-term growth in a country. Tax morale is a positive attitude toward taxation shaped by extrinsic and intrinsic motivations, including numerous psychological factors. However, these factors are far from completely clear and a better understanding of what drives tax morale can greatly help governments in the design of tax policies and their administration. In this paper we test the novel hypothesis that life satisfaction is one of the psychological aspects affecting tax morale. Using longitudinal data from the World Value Survey, we show that people more satisfied with their own life show higher tax morale. We also provide evidence on the roles played by confidence in government and people's cultural orientation in shaping the relationship between life satisfaction and tax morale. Our findings support the idea that implementing alternative policies that, directly or indirectly, increase tax morale could be politically relevant for helping governments mobilize adequate resources from taxation, given that tax evasion prosecution is far from perfect.

Suggested Citation

  • Ciziceno, Marco & Pizzuto, Pietro, 2022. "Life satisfaction and tax morale: The role of trust in government and cultural orientation," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 97(C).
    • Handle: RePEc:eee:soceco:v:97:y:2022:i:c:s2214804321001634
    DOI: 10.1016/j.socec.2021.101824
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    2. Yu-Chuan Chen & Yung-Ho Chiu & Tzu-Han Chang & Tai-Yu Lin, 2023. "Sustainable Development, Government Efficiency, and People’s Happiness," Journal of Happiness Studies, Springer, vol. 24(4), pages 1549-1578, April.
    3. Abreham Adera, 2024. "Chinese Aid Projects and Local Tax Attitudes: Evidence from Africa," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 36(1), pages 102-134, February.
    4. Ariel Herbert Fambeu & Georges Dieudonné Mbondo & Patricia Tchawa Yomi, 2022. "Bigger or better? The effect of public spending on happiness in Africa," African Development Review, African Development Bank, vol. 34(4), pages 487-499, December.
    5. Beata Holkova & Eva Malichova & Lukas Falat & Lucia Pancikova, 2023. "Determinants of Tax Ethics in Society: Statistical and Logistic Regression Approach," Mathematics, MDPI, vol. 11(10), pages 1-21, May.
    6. Martinangeli, Andrea F.M. & Windsteiger, Lisa, 2024. "Inequality shapes the propagation of unethical behaviours: Cheating responses to tax evasion along the income distribution," Journal of Economic Behavior & Organization, Elsevier, vol. 220(C), pages 135-181.
    7. Víctor Mauricio Castañeda-Rodríguez & Gaetano Lisi, 2024. "Can public efficiency increase tax morale? Evidence from 18 Latin American countries," Economics of Governance, Springer, vol. 25(2), pages 209-231, June.

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